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Maryland House committee unanimously approves legislation to reform UMMS board after self-dealing scandal

Maryland House committee unanimously approves legislation to reform UMMS board after self-dealing scandal
A House committee advanced Friday legislation to reform the University of Maryland Medical System’s board after accusations of self-dealing that have rocked the network. In this March 14, 2019, photo, President and CEO Robert Chrencik testifies before a Senate committee. (Kenneth K. Lam / The Baltimore Sun)

A House of Delegates committee voted unanimously Friday to advance sweeping legislation that would reform the University of Maryland Medical System’s board of directors amid accusations of self-dealing that have rocked the hospital network.

The Health and Government Operations Committee voted 22-0 for House Speaker Michael Busch’s legislation. It would bar no-bid contracts for the hospital network’s board members, force all members to resign and reapply for their positions, and mandate an audit of contracting practices.

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The legislation was introduced after The Baltimore Sun reported this month that nine of the board’s 30 members — including Baltimore Mayor Catherine Pugh — had deals benefiting their private companies with the hospital system they were tasked with overseeing. The deals were worth from hundreds of thousands to millions of dollars. Some arrangements were the result of a bidding process; others were sole-source deals.

Every member of the Health and Government Operations Committee signed onto Busch’s bill as co-sponsors.

“It’s the right thing to do,” said Del. Shane Pendergrass, a Howard County Democrat who chairs the committee. “I feel the way everyone feels: It’s completely unacceptable for people to be profiting financially from what was supposed to be the public service of volunteers.”

Pendergrass said she knew the bill likely would be amended in the Senate.

“There will be more changes made, we know that,” she said. “It’s OK if it gets better.”

The fast-tracked legislation from Busch — who has a seat on the board under state law — also would require an independent audit of financial management at the medical system by Dec. 31. It would require the governor’s appointees to the board to submit to vetting by the state Senate. Board members would have to file financial disclosure forms that would be turned over to the leadership of the House of Delegates, the state Senate and the governor.

The legislation would require all board members to step down and reapply for their position by the end of the year. Under the current version of the bill, about half of the board members would have to resign by June and the other half by October.

Del. Joseline Peña-Melnyk, who represents Anne Arundel and Prince George’s counties and is vice chairwoman of the committee, said she was glad Busch was “taking swift action in ensuring that the bill provides transparency, disclosure, oversight and reporting.”

Peña-Melnyk said the unanimous committee vote “sends a message that the General Assembly demands the board to be honest in their dealings.”

Sen. Jill P. Carter, a Baltimore Democrat who is sponsoring the Senate version of the bill, called the committee vote “good news” and said she was confident the reform legislation would pass both chambers.

The revelations of board members entering into deals with the hospital network that benefited their private companies has sparked an outcry in Annapolis and across the state.

As a result, three board members, including Pugh, resigned and four more were placed on leave. System CEO Robert A. Chrencik — who is paid $4.2 million annually — also was placed on leave.

Pugh resigned amid scrutiny over her no-bid deal to sell 100,000 copies of her self-published “Healthy Holly” children’s book series to the medical system from 2011 to 2018 for $500,000.

Pugh also amended seven years of ethics forms she filed while she was in the state Senate that did not disclose her Healthy Holly LLC, through which she sold the books.

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The mayor apologized Thursday for upsetting the people of Baltimore. She also said that 20,000 books, for which she was paid $100,000 in 2017, were “delayed” and are only now being shipped. She said she had no contract with the hospital network and was under no deadline to complete the work.

She already has returned $100,000 for a fifth order of the books.

“In hindsight, this arrangement with the University of Maryland Medical System was a regrettable mistake,” Pugh said at a news conference at City Hall.

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